Tullow Oil full-year results: where next for the share price?
The UK-based oil and gas company continues to see its share price fall in 2020, with it forced to cut costs after suffering a decline in revenues from its operations Ghana.
Tullow Oil continues to see its share price slide further in 2020, with the stock down more than 25% year-to-date (YTD), closing at 44p on Thursday.
The stock’s downward trajectory is being driven by further job cuts announced across its operations in east Africa, particularly in Kenya and Uganda.
The weakness of its balance sheet has forced Tullow Oil to cut back on its operations in the region, leading investors to question the possibility of oil production and exploration.
Tullow Oil has seen a steep decline in revenues from its Ghana operations due to operational delays and reports of poor oil quality at its Guyana site, which have put the company under greater financial strain.
As it stands, Tullow Oil has around £2.16 billion of debt on its balance sheet, brought about by the last crash in oil prices back in 2016 when Brent crude futures sunk to under $30 a barrel.
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Barclays Capital downgrades Tullow Oil
Analysts at Barclays Capital took a dim view of the stock in January, downgrading its rating to ‘equal weight and slashing its price target to 75p a share.
Based on Tullow Oil trading at 44p, analysts from Barclays Capital believe the stock has a potential upside of 70%.
Analysts will likely rethink their outlook for the stock in February, considering Tullow Oil has seen its share price lose more than a quarter of its value since the start of the year.
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Total dismisses takeover rumours
Due to the challenges the company faces, rumours have begun circulating that Tullow Oil could become a takeover target for Total.
Total’s chief executive officer (CEO) Patrick Pouyanne, however, was quick to dismiss the speculation, telling Reuters: ‘Stop dreaming… No’.
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